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Compliance, Rolls-Royce, and DPAs—what went wrong?

Legal commentators have rightly hailed the announcement of a deferred prosecution agreement (DPA) between the Serious Fraud Office (SFO) and Rolls-Royce as a huge victory for the SFO. It signals the arrival of the SFO in the “big league” of prosecuting regulators for financial misconduct and represents a truly devastating judgment against Rolls-Royce, which now has to account for criminal conduct in seven jurisdictions involving three business sectors over an almost 30-year period.

The judgment of Sir Brian Leveson, who made the judicial decision on the Rolls-Royce prosecution, provides a fascinating insight into some of the issues that will face other companies under investigation for fraud and how the courts may deal with those issues. It also offers an insight into the compliance strategies in place at Rolls-Royce and why they were so ineffective.